Final Fantasy VII was overrated, no two ways about it, but it's still a great game. Most of your arguments hold up, except for these:

Game took 3 years to make, more than any FF before it. In no way was it rushed.

The translation is bad because the team who did the original Japanese took it upon themselves to translate it. At this time, Square was in a dispute with their go-to guy for translations, Ted Woolsey. After several botched translations, they felt they could do it better. They couldn't, and for subsequent games hired Tom Slattery to take over translation duties, hence the higher quality of subsequent translations.

As for good games that disappointed me, I'd say really the only one in recent memory is Fuel. Overall, it's a great game with a lot of interesting ideas. I'm usually down for whatever Codemasters throws at me (GRiD, DiRT, etc.), but this game is so marred with repetition that it's near impossible to drone your way through it.